Questions from Corporate Finance

Q: If you were an athlete negotiating a contract, would you want

If you were an athlete negotiating a contract, would you want a big signing bonus payable immediately and smaller payments in the future, or vice versa? How about looking at it from the team’s perspec...

Q: Should lending laws be changed to require lenders to report EARs instead

Should lending laws be changed to require lenders to report EARs instead of APRs? Why or why not?

Q: There are four pieces to an annuity present value. What are

There are four pieces to an annuity present value. What are they?

Q: As you increase the length of time involved, what happens to

As you increase the length of time involved, what happens to the present value of an annuity? What happens to the future value?

Q: Eligibility for a subsidized Stafford loan is based on current financial need

Eligibility for a subsidized Stafford loan is based on current financial need. However, both subsidized and unsubsidized Stafford loans are repaid out of future income. Given this, do you see a possib...

Q: A viatical settlement is a lump sum of money given to a

A viatical settlement is a lump sum of money given to a terminally ill individual in exchange for his life insurance policy. When the insured person dies, the purchaser receives the payout from the li...

Q: On subsidized Stafford loans, a common source of financial aid for

On subsidized Stafford loans, a common source of financial aid for college students, interest does not begin to accrue until repayment begins. Who receives a bigger subsidy, a freshman or a senior? Ex...

Q: Could a company’s change in NWC be negative in a given year

Could a company’s change in NWC be negative in a given year? Explain how this might come about. What about net capital spending?

Q: Ben Bates graduated from college six years ago with a finance undergraduate

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degr...

Q: You are looking at a one-year loan of $10

You are looking at a one-year loan of $10,000. The interest rate is quoted as 8 percent plus three points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes simil...